(2)(a) The Public Utility Commission shall establish and implement a competitively neutral and nondiscriminatory universal service fund. Except as provided in paragraph (b) of this subsection, the Public Utility Commission shall use the universal service fund to ensure basic telephone service is available at a reasonable and affordable rate. The Public Utility Commission may adopt rules to conform the universal service fund to section 254 of the federal Telecommunications Act of 1996 (Public Law 104-104), and to related regulations adopted by the Federal Communications Commission, to the extent that the Public Utility Commission determines conforming the rules is appropriate.

(b) In addition to using the universal service fund to ensure basic telephone service, the Public Utility Commission may use the universal service fund to encourage broadband service availability and to provide support to telecommunications carriers that provide both basic telephone service and broadband service.

(3)(a) The Public Utility Commission shall establish the price a telecommunications utility may charge its customers for basic telephone service. The commission shall periodically review and evaluate the status of telecommunications services in the state and designate the services included in basic telephone service. The commission shall periodically review and adjust as necessary the price a telecommunications utility may charge for basic telephone service.

(b) The provisions of this subsection do not apply to the basic telephone service provided by a telecommunications utility described in ORS 759.040.

(4)(a) The commission shall establish a benchmark for basic telephone service as necessary for the administration and distribution of the universal service fund. The universal service fund shall provide explicit support to an eligible telecommunications carrier that is equal to the difference between the cost of providing basic telephone service and the benchmark, less any explicit compensation received by the telecommunications carrier from federal sources specifically used to recover local loop costs and less any explicit support received by the telecommunications carrier from a federal universal service program.

(b) The commission shall periodically review the benchmark established under paragraph (a) of this subsection and adjust the benchmark as necessary to reflect:

(A) Changes in competition in the telecommunications industry;

(B) Changes in federal universal service support; and

(C) Other relevant factors as determined by the commission.

(c) Except for a telecommunications utility described in ORS 759.040, the commission shall seek to limit the difference between the price a telecommunications utility may charge for basic telephone service and the benchmark.

(5) There is imposed on the sale of all retail telecommunications services sold in this state a universal service surcharge. Unless otherwise provided by the commission by rule, the universal service surcharge must be a uniform percentage of the sale of retail telecommunications services in an amount sufficient to support the purposes of the universal service fund established under subsection (2) of this section, provided that the percentage does not exceed 8.5 percent of the sale of retail telecommunications services. The universal service surcharge may be listed as a separate line item by all telecommunications carriers, as prescribed by the commission by rule or order. A telecommunications carrier shall transmit amounts collected pursuant to this section to the commission in accordance with a schedule adopted by the commission. The commission shall deposit moneys transmitted to the commission pursuant to this subsection in the universal service fund established under subsection (2) of this section.

(6) The universal service fund established under subsection (2) of this section is separate and distinct from the General Fund. The universal service fund shall consist of all universal service surcharge moneys collected by telecommunications carriers and transmitted to the commission for deposit in the universal service fund. The universal service fund may be used only for the purposes described in this section and for payment of expenses incurred by the commission or a third party appointed by the commission to administer this section. All moneys in the universal service fund are continuously appropriated to the commission to carry out the provisions of this section. Interest on moneys deposited in the universal service fund shall accrue to the universal service fund.

(7) A person that primarily provides radio communications service, radio paging service, commercial mobile radio service, personal communications service or cellular communications service may request designation as an eligible telecommunications carrier by the commission for purposes of this section if the person imposes the universal service surcharge described in subsection (5) of this section and transmits the moneys collected to the commission for deposit in the universal service fund established under subsection (2) of this section for at least one year immediately prior to requesting the designation.

(8) A pay telephone provider may apply to the commission, on a form developed by the commission, for a refund of the universal service surcharge imposed on the pay telephone provider under subsection (5) of this section for the provision of pay telephone service. [1999 c.1093 §28; 2001 c.966 §3; 2003 c.14 §§455,456; 2007 c.353 §1; 2009 c.885 §16; 2011 c.189 §1; 2017 c.32 §1]